P&ID gas project: British court grants firm permission to seize Nigerian assets worth $9.6bn
A British court has given Process and Industrial Development Limited (P&ID) the approval to seek to seize the Nigerian government's assets worth $9.6 billion.
According to a report by Reuters, the court in a judgement delivered on Friday, August 16, said it would grant the foreign firm the right to seek to seize the federal government's assets worth $9.6 billion over an aborted gas project.
The newspaper reported that P&ID was awarded $6.6 billion in an arbitration decision over a failed project to build a gas processing plant in Calabar, Cross River state's capital.
P&ID had reportedly had an agreement with the Nigerian government in 2010 to build a gas processing plant but the deal collapsed because Nigeria did not meet its end of the bargain.
The judge’s decision reportedly converts the arbitration award to a legal judgement, which would allow P&ID to try to seize assets worth $9 billion, interests included.
Commenting on the judgement on behalf of the company, Andrew Stafford Q.C. of Kobre & Kim said: “We are pleased that the court has rejected Nigeria’s objections both to the arbitration process and to the amount of the award and that it will grant permission to P&ID to begin enforcement of the award in the United Kingdom.
“The court has ruled decisively in P&ID’s favour and has comprehensively rejected Nigeria’s efforts to avoid payment of this award of over $9.6 billion.
“P&ID is committed to vigorously enforcing its rights, and we intend to begin the process of seizing Nigerian assets in order to satisfy this award as soon as possible.”
What is the deal about?
P&ID, a firm founded by two Irish businessmen, in 2010 entered into a 20-year gas and supply processing agreement (GSPA) with the federal government to build a state-of-the-art gas processing facility in Calabar. Nigeria was to have a 10% stake, according to the agreement.
The plant was to refine associated natural gas into non-associated natural gas to power the national electric grid.
The agreement stipulated Nigeria would receive 85% of the non-associated gas at no cost for electrical generation and industrialisation. P&ID would receive the remaining 15% of byproduct – methane, propane, butane – to sell on the commercial markets, of which Nigeria would receive proceeds from their 10% stake in the company’s ownership, The Cable reports.
Based on the agreement, the government was to supply 150 million standard cubic feet (scf) of the gas per day to P&ID — rising to 400 million scf in the life of the project. The gas was otherwise being flared by the oil-producing companies.
Pensioners applaud Appeal Court judgement outlawing pension for political office holders The GSPA also required the government to build a gas supply pipeline to the P&ID facility.
P&ID said after spending several years preparing for the project, the project collapsed because the Nigerian government did not build a pipeline or secure supply of gas as stipulated in the agreement.
The legal battle
In 2012, P&ID took the government to arbitration over the reported failure of the deal.
The tribunal was reportedly organised in London under the rules of the Nigerian Arbitration and Conciliation Act as part of the original contractual agreement between parties.
In January 2017, P&ID won the case as the tribunal ruled that Nigeria was liable for $6.6 billion in damages, which was based on what the company could have earned during the 20-year agreement. However, with interest payments over the years, the amount is over $9 billion.
Assets to be seized
While it is not immediately which assets are eligible to be seized, Reuters said that assets used for diplomatic purposes – such as the Nigerian High Commission building in central London – are not eligible for seizure, but commercial assets are.
Nurudeen Lawal
legit.ng